Employment relationship

Case 9: The facts

When he was identified as being at risk of redundancy, Mr Middleton's employer agreed that he could take redundancy but continue to provide his services as a consultant.

Middleton received a redundancy payment, but carried out working under a contract that said he was self-employed. He was paid a fixed monthly sum on submission of an invoice, plus a share of the company's profits. He was responsible for his own tax and National Insurance and was not paid holiday or sick pay. He could work for other companies as long as they were not competitors.

When his new contract was terminated, Middleton claimed that he was an employee and had the right to claim for unfair dismissal.

The ruling

The Employment Appeal Tribunal held that Middleton was an employee. Although both parties had intended to create a contract of self-employment, their intention did not determine what the employment relationship was in reality.

Middleton had done the same work as he had before, at the same desk and with the assistance of the company's staff. There were elements that were consistent with self-employment, but overall the relationship was one of employer and employee.

McCallum v Middleton EATS/0020/05